BofA ex-counsel says he was stunned by firing

By IBT Staff Reporter On 11/16/09 AT 6:56 PM

Former Bank of America Corp general counsel Timothy Mayopoulos said he was stunned to be fired as the bank was trying to wrap up its purchase of Merrill Lynch & Co, after being promised the same job at the combined company.

According to congressional testimony obtained by Reuters on Monday, Mayopoulos' firing on December 10, 2008 came just nine days after he told Bank of America executives that Merrill's expected losses at the time provided no basis to invoke a contractual provision to abandon the takeover.

I had never been fired from any job, and I had never heard of the general counsel of a major company being summarily dismissed for no apparent reason and with no explanation, he said in testimony.

Mayopoulos is now Fannie Mae's general counsel.

The U.S. House of Representatives Oversight and Government Reform Committee is holding a hearing on Tuesday to examine the government's role in the merger as well as whether Bank of America misled investors, among other things.

Others scheduled to testify are Brian Moynihan, who succeeded Mayopoulos as general counsel and is now Bank of America's retail banking chief, as well as two of the bank's directors, Charles Chad Gifford and Thomas May.

Moynihan has long been considered a leading candidate to replace retiring Bank of America Chief Executive Kenneth Lewis. He is a former executive at FleetBoston Financial Corp, which was led by Gifford until it was bought by Bank of America in 2004.

Mayopoulos said that Lewis had told him prior to being fired that he would be general counsel of the combined company. He also said that Moynihan, who was running the bank's corporate and investment banking unit at the time, told him he (Moynihan) had had no interest in being the general counsel.

The oversight committee has been probing the events leading up to the close of the merger and has been looking at whether Bank of America failed to adequately disclose to shareholders Merrill's fourth-quarter losses, which totaled $15.8 billion.

Those losses were disclosed after the deal closed early in January of this year. They have been scrutinized by shareholders and U.S. authorities, who contend that the bank should have disclosed the losses sooner.

Mayopoulos said in mid-November he had had conversations with the bank's outside counsel from law firm Wachtell Lipton Rosen & Katz and determined that disclosing Merrill's $5 billion of projected losses was not warranted.